European stocks saw a slight decline on Tuesday, primarily due to a drop in the banking and insurance sectors, which are often sensitive to interest rate changes.
The pan-European STOXX 600 index fell by 0.15%, with both banking and insurance stocks losing approximately 1%.
Several companies experienced notable individual stock movements. For example, shares in elevator maker Schindler dropped 1.7% after a major investor sold off a large block of shares at a discounted price. Meanwhile, French cosmetics giant L’Oreal saw its stock price fall by 2% following a downgrade from the financial firm Jefferies.
In contrast, luxury car maker Ferrari had a good day, with its shares climbing 2.6% after the firm Berenberg recommended buying the stock, citing the company’s strong brand, pricing power, and consistent returns.
On the FX front, the U.S. dollar fell on Tuesday. It hit its lowest point in two and a half months against the euro and a ten-month low against the Australian dollar.
The dollar also weakened to a more than two-month low against the British pound, following renewed calls from US President Donald Trump for the Federal Reserve to aggressively lower interest rates.
The US dollar index, which measures the dollar’s value against other major currencies, dropped to its lowest level since July 24. As the dollar weakened, other currencies rose. The euro gained against the dollar ahead of the release of some key economic data from Germany and Italy.
The British pound also strengthened, reaching its highest level against the dollar since early July, with new employment data expected and the Bank of England’s policy meeting coming later in the week.
The Australian dollar reached its strongest level since last November, supported by positive stock market performance in Asia.
Finally, the dollar also slipped against the Japanese yen ahead of a Bank of Japan meeting on Friday, where a rate hike is not expected.
Currency Power Balance